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Politics : Politics for Pros- moderated
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To: LindyBill who wrote (215266)8/10/2007 11:55:10 AM
From: Steve Lokness  Read Replies (3) of 794002
 
LindyBill;

This is more than just "adding liquidity to the system." It is the beginning of the Fed's attempt to bail out the mortgage industry's big players.

I've been trying to understand how the fed could get such huge amounts of money into the economy this fast. If they are buying all the unperforming loans (mortgaged backed securities) aren't they rewarding the greedy unscupulous lender who made loans to people who should never have the loans? Meanwhile the homeowner is still stuck with his mortgage that he can't pay. Does the taxpayer - by way of the fed - then get stuck with the cost of these under performing loans?

Meanwhile, can we say, "moral hazard?" (I know, nemo, I know…not very pragmatic, am I?)

Not sure it is pragmatic to drop from the helicopter. - You know there is one presidential candidate out there who does not believe in playing these games!

steve
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